CHAPTER VI - Capital Formation during the Period of Early Industrialization in Russia, 1890–1913

Summary

General Characteristics

Economic historians commonly describe the period from the late 1880s until the First World War as a period of intensive industrialization in Russia, during which a number of structural changes in the economy and society took place. It was a period marked by rapid population growth and advances in agriculture: the growth of the planted area and of crop yields, the increased commercialization of agricultural production, and a rise in the mobility of the agricultural labour force. It was accompanied by a rapid increase of capital overhead, chiefly railways, built with the assistance of foreign capital and government subsidies. But it was also a period of accelerated urbanization, an expansion of the market economy which stimulated the growth in the size of the capital stock of industry as the fastest-growing sector of the Russian economy. The increase of industrial production was also due to the formation of an industrial labour force, growing both in numbers and quality of its industrial skills. To be sure, all these changes were not sufficient to transform Russia from a backward agricultural economy into a modern industrial one; nevertheless, much was achieved during this particular period that facilitated the subsequent efforts to industrialize Russia.

It is, therefore, to the chief elements of change – the economic and social forces that harnessed Russia to the chariot of industrialization – that this chapter addresses itself. The task is a difficult one for a number of reasons.